7.
CityLYNX Gold Line Phase 2
Action:
A. Approve the Economic Development Committee
recommendation regarding the City Manager’s CityLYNX
Gold Line Phase 2 Proposal,
B. Authorize the City Manager to apply for federal grant and
Staff Resources:
Ruffin Hall,
Manager’s
Office
loan funding
forCity
50%
of the CityLYNX
Gold Line Phase 2, and
Jeb Blackwell, Engineering & Property Management
C. Adopt
a budget
ordinance
Carolyn
Flowers,
Transitto allocate $63 million in existing
General
Capital
Investment
Pay-As-You-Go
Municipal
Brad Richardson, Neighborhood
& Business and
Services
Debt Service Funds to provide a 50% City local match for the
CityLYNX Gold Line Phase 2.
Committee Chair: James Mitchell
Staff Resources:
Ruffin Hall, City Manager’s Office
Jeb Blackwell, Engineering & Property Management
Carolyn Flowers, Transit
Patrick Mumford, Neighborhood & Business Services
Overview
 In April 2013, the City Manager requested an opportunity to review and analyze
the CityLYNX Gold Line Phase 2 Project.
 Following a City staff review of all aspects of the CityLYNX Gold Line Phase 2
Project, the City Manager presented to City Council at the May 13 Dinner Briefing
an updated plan and recommendation to move forward.
 Approval of this agenda item advances CityLYNX Gold Line Phase 2 as described
in the Manager’s Recommendation Paper. Additional supporting detail is included
in the attached CityLYNX Gold Line Recommendation Paper.
 The CityLYNX Gold Line recommendation and plan for moving forward will be
consistent with the recommendations of the Transit Funding Working Group, the
Metropolitan Transit Commission, and the adopted 2030 Transit Plan.
 Assuming City Council approval, the Business item for the TIGER grant, on page
14 of the agenda, authorizes staff to proceed with the first grant opportunity.
Explanation
 The City Manager’s recommendation included:
− Request that the Metropolitan Transit Commission (MTC) endorse branding
the “streetcar” element of the 2030 Transit Plan as the “CityLYNX Gold Line”.
− Request that the MTC endorse the City’s application for federal grant and loan
funding for CityLYNX Gold Line Phase 2, with the City providing a 50% local
match.
− Recommend that City Council, at its May 28th Council Business Meeting:
authorize staff to prepare and submit applications for federal grant and loan
funding for the CityLYNX Gold Line Phase 2; and authorize the reallocation of
unexpended and unobligated balances in the City’s General Capital
Investment Pay-As-You-Go and Municipal Debt Service Funds to provide
either cash or debt payments up to 50% of the cost of the CityLYNX Gold Line
Phase 2, providing that such amounts not exceed the non-property tax
revenue sources.
May 28, 2013
9



In addition to the above recommendations, the CityLYNX Gold Line
Recommendation Paper (attached) includes:
− Project descriptions such as cost, vehicles, alignment, and operations;
− The policy rationale around the CityLYNX Gold Line, including economic
development, community connections, and transit system relationships;
− Branding and marketing strategies;
− Funding frameworks including federal grants and loans and local revenue
sources; and
− Relationships to the current Transit System policy framework, such as those
of the MTC and the recommendations from the Transit Funding Working
Group.
BAE Urban Economics (BAE) completed an Economic Development Update Study
on the economic development impacts from the 4-mile segment covering
CityLYNX Gold Line Phase 1 and 2. A copy of the BAE Summary Study is
attached. Highlights of the study show the following economic impacts by 2035:
− 1.1 million or more square feet in new development, including:
o 276,700 square feet of additional office space
o 21,800 square feet of additional retail space
o 731 additional residential units
o 101 additional hotel rooms
− Increase in incremental property tax revenues could range from $4.7 million
to $7 million per year by 2035.
The CityLYNX Gold Line is an integral part of the approved 2030 Transit Plan,
supporting connections to employment, small businesses, entertainment,
educational institutions, healthcare, and so on. Additionally, the CityLYNX Gold
Line represents a critical connection for the efficient and robust operation of the
overall transit system, including linking the future Red Line at Gateway Station to
the Blue Line at the Charlotte Transportation Center.
CityLYNX Gold Line Phase 2 Description
 CityLYNX Gold Line Phase 2 will add 2.5 miles to the previously approved 1.5 mile
Phase 1 project currently under construction, creating a 4-mile segment of
permanent transit infrastructure.
 CityLYNX Gold Line Phase 2 will extend west from the Charlotte Transportation
Center to French Street (2.0 miles) and east along Hawthorne Lane from
Presbyterian Hospital to Sunnyside Avenue (0.5 miles).
 The 2.5-mile alignment of Phase 2 will have 11 stops, adding to the six stops
along the 1.5-mile Phase 1 alignment.
 The combined 4-mile alignment of Phase 1 and 2 will connect the Charlotte
Transportation Center and the LYNX Blue Line with the proposed Gateway Station
that will service the proposed LYNX Charlotte Transportation Center, Red Line,
Greyhound, and future Amtrak service.
 The estimated total capital funding of $126 million will be needed to construct the
2.5-mile CityLYNX Gold Line Phase 2.
 Annual operating cost in the first year of operation is estimated to be $3.3 million
to support vehicle operations, basic equipment maintenance, and safety and
security. An additional approximately $1 million per year will be required to build
a capital maintenance reserve to perform regular vehicle overhauls every five
years and mid-life overhauls every 15 years.
 It is important to note that cost projections are based on current estimates. The
$126 million estimated capital cost will need to be escalated and the ultimate
cost will be higher depending on when approvals are granted.
May 28, 2013
10
Funding Framework
 Staff recommends a 50-50 federal and local funding split.
 In staff’s assessment, the CityLYNX Gold Line would be highly competitive in an
application for federal funds.
 Capital funding, to cover the City’s 50% local match, for the CityLYNX Gold Line
Phase 2 would come from the use of unallocated and contingent capital accounts
in the Municipal Debt Service Fund and the Pay-As-You-Go Fund in the General
Capital Investment Plan.
 Staff has concluded that the City’s $63 million local share is well within an
amount that can be funded from the non-property tax revenues of sales tax,
interest on investments, vehicle rental tax, and other non-property tax revenues
within these General Capital Investment Funds.
 None of the 3.17-cent recommended increase in the property tax for the FY20142018 General Capital Investment Plan would be used for the CityLYNX Gold Line.
 Funding for operations of the CityLYNX Gold Line will be provided from a variety
of sources including ridership fares, advertising, naming rights, and potentially
some form of property-based value capture revenue from sources such as Tax
Increment Financing districts, Special Assessment Districts, or Municipal Service
Districts.
 Operating funds will not be needed until 2019 at the earliest. The City will
continue to work with the MTC for new sources of transit funding.
Council and Committee Meeting Discussions
 At the May 13 Dinner Briefing, City Council authorized staff to submit a request
to the MTC at their next meeting on May 22 to:
−
Endorse branding the “streetcar” element of the 2030 Transit Plan as the
“CityLYNX Gold Line”, and
−
Endorse the City’s application for federal grant and loan funding for
CityLYNX Gold Line Phase 2, with the City providing a 50% local match.
 At the May 22 meeting, the MTC received the Transit Funding Working Group’s
report on options to address the entire transit system.
 Staff will provide an update of the MTC discussion in the Council-Manager Memo
on Friday, May 24.
 At their May 16 meeting, the City Council Economic Development Committee
received an updated report from BAE on economic development impacts from the
4-mile segment covering CityLYNX Gold Line Phases 1 and 2 (attachment three).
 Following the BAE presentation, the Economic Development Committee voted 3-1
(Mitchell, Howard, and Mayfield voted yes; Cooksey voted no; Cannon was
absent) in favor of the City Manager’s CityLYNX Gold Line Recommendation. The
data presented in BAE’s report will be incorporated into the CityLYNX Gold Line
plan going forward.
Funding
Federal grants and loans and General Capital Investment Fund
Attachment 2
CityLYNX Gold Line Recommendation Paper
CityLYNX Gold Line Recommendation PowerPoint Presentation
CityLYNX Gold Line: BAE Economic Development Update Study Summary
CityLYNX Gold Line: BAE Economic Development Update Study PowerPoint Presentation
Staff responses to City Council questions on CityLYNX Gold Line
Budget Ordinance
May 28, 2013
11
CITY MANAGER’S OFFICE
MEMORANDUM
May 13, 2013
TO:
Mayor and City Council
FROM:
Ron Carlee, City Manager
SUBJECT:
CityLYNX Gold Line Recommendation
In April 2013, the Mayor and City Council authorized the City Manager to review and
analyze the previously proposed Streetcar project, referred to herein as the CityLYNX Gold
Line. City staff have reviewed all aspects of the project including, but not limited to, scope,
cost, alignment, policy rationale, connection to the Metropolitan Transit Commission,
funding options, and communications/branding.
Based on this review, it is recommended that the City proceed with this integral part of the
overall transit plan.
Specifically, it is my recommendation that the “CityLYNX Gold Line” be submitted to the
Metropolitan Transit Commission (MTC) on May 22nd with a request that the MTC endorse
branding the “streetcar” element of the 2030 Transit Plan as the “CityLYNX Gold Line” and
endorse applications for federal funding for Phase 2 of the CityLYNX Gold Line, with the City
providing the 50% local match.
Following consideration by the MTC, I recommend that the Council, at its May 28th meeting,
(1) authorize the staff to prepare and submit applications for federal funding for the
CityLYNX Gold Line Phase 2, and (2) authorize the reallocation of unexpended and
unobligated balances in the City’s Pay-As-You-Go budget and Debt Service Fund Budget to
provide either cash or debt payments up to 50% of the cost of the CityLYNX Gold Line Phase
2, provided that such amounts not exceed revenue sources to these funds excluding
property taxes.
CityLYNX Gold Line is an integral part of the 2030 Transit Plan. This project has been
branded the CityLYNX Gold Line to align the project with the other rail components in the
2030 Transit Plan: Blue Line, Red Line and Silver Line. To date, the project has been
referred to generically as the “streetcar”. The CityLYNX Gold Line is not a novelty, tourist
attraction, but an integral part of the approved transit plan, supporting economic
development and connections to employment and activity centers. It is a rail project
literally linking the Blue and Red Lines.
There are two fundamental reasons for advancing the CityLYNX Gold Line similar to the
compelling reasons for the other rail projects:
•
The CityLYNX Gold Line provides a critical economic development tool to focus
growth along key corridors, connecting neighborhoods to community interests such
as businesses, employment, entertainment, educational institutions, healthcare, etc.
•
The CityLYNX Gold Line provides a critical connection for the efficient and robust operation
of the overall transit system, including linking the future Red Line at Gateway Station to
the Blue Line at the Charlotte Transportation Center and other transportation modes.
It is important to note that the CityLYNX Gold Line is not a new idea:
•
It has been a key component of the Metropolitan Transit Commission (MTC) Corridor
System Plan since 2002 and was reaffirmed in the 2030 Corridor System Plan update
adopted by the MTC on November 15, 2006.
•
Phase 1 is currently under construction at a cost of $36.99 million, of which $12.0
million is from City funds.
•
30% of the engineering and design work has been completed on Phase 2.
•
Advancing Phase 2 at this time does still take at least until 2019 to become operational.
CityLYNX Gold Line should be reviewed by the Metropolitan Transit Commission
(MTC). In advancing the project, however, it is important that it be done consistent with
the recommendations of the Transit Funding Working Group as they may be received by the
Metropolitan Transit Commission. Accordingly, it is recommended that the CityLYNX Gold
Line recommendation be submitted to the MTC at its May 22, 2013 meeting.
CityLYNX Gold Line depends on federal funding. The compelling reason to advance the
CityLYNX Gold Line at this time is the potential for federal funding. This is an opportunistic
effort that would be contingent on approval of federal funding in a highly competitive
process. If federal funds are not awarded, the timing of CityLYNX Gold Line will have to be
reevaluated in the context of the larger challenges around funding for the 2030 Transit Plan.
It is recommended that Charlotte aggressively compete for federal funding at a 50% match
level. Federal opportunities include Federal Transit Administration (FTA) New Starts or Small
Starts programs, Transportation Investments Generating Economic Recovery (TIGER)
grants, and Transportation Infrastructure Finance and Innovation Act (TIFIA) loans.
Local match would not come from property taxes. Recognizing the public
commitments made regarding use of property taxes for transit, staff has confirmed that
there is sufficient capacity in non-property tax capital funds that can be reallocated to
provide the City local match to federal funding. In the past five years, an annual average of
84% of all revenue sources supporting the General Capital Pay-As-You-Go Fund has been
derived from sales taxes, vehicle rental taxes, and other non-property tax revenues. In the
Municipal Debt Service Fund, an average of 44% of the revenue sources over the past five
years were derived from sales taxes, interest on investments, and other non-property tax
revenues.
Future operating costs would come from a combination of revenues such as fares,
advertising, naming rights, Pay-As-You-Go capital, and possible value capture such as Tax
Increment Financing and Municipal Service Districts. A new funding stream developed in
collaboration with the Metropolitan Transit Commission would be the ideal source of
operating costs. If a new funding stream is not created, however, in approximately 5 – 7
years, the City will need to have identified a funding stream to maintain the system, which
could include a reprioritization of services.
I look forward to additional conversation with the Mayor and City Council regarding the
recommendation.
Next Steps:
•
May 16: BAE study presented at Economic Development Committee
•
May 22: Metropolitan Transit Commission (MTC) reviews and endorses City Manager
Recommendation on CityLYNX Gold Line Phase 2 and receives report from the Transit
Funding Working Group
•
May 28: Possible Council action
Attachment:
CityLYNX Gold Line Phase 2 Recommendation
CityLYNX Gold Line Phase 2
City Manager’s Recommendation
Introduction
The 2030 Corridor System Plan adopted on November 15, 2006 included sixteen (16) miles
of streetcar, referred to herein as the CityLYNX Gold Line. The plan proposed that a 6-mile
alignment of dual track from the proposed Charlotte Gateway Station along West Morehead
Street and Wilkinson Boulevard to Charlotte-Douglas International Airport, and a 10-mile
alignment of dual track from Rosa Parks Community Transit Center on Beatties Ford Road to
Eastland Community Transit Center on Central Avenue be constructed by 2030.
Project Description
The CityLYNX Gold Line has been part of the Metropolitan Transit Commission (MTC)
Corridor System Plan since 2002 and was reaffirmed in the 2030 Corridor System Plan
update adopted by the MTC on November 15, 2006.
Overall the system is 10 miles and is being constructed in phases, based largely on the
availability for funding, as well as the complexities of design. The actions to date on the
CityLYNX Gold Line include:
•
City funding of $8.0 million for the advancement of CityLYNX Gold Line design
•
Completion of 30% design-level plans for the entire 10-mile CityLYNX Gold Line corridor
•
CATS funding of approximately $12 million for conceptual engineering for the
CityLYNX Gold Line conducted from 2004-2006 and streetcar infrastructure in the
Elizabeth Avenue Business Corridor project.
•
Completion of construction on the Elizabeth Avenue Business Corridor, including ½
mile of in-street embedded track, overhead catenary system poles, and underground
infrastructure to support the future CityLYNX Gold Line
•
Completion of an environmental assessment of the full 10-mile route with a Finding
of No Significant Impact, and
•
Completion of five months of the 27-month construction project on Phase 1 of the
CityLYNX Gold Line
The following describes the phasing of the CityLYNX Gold Line
CityLYNX Gold Line Phase 1: Charlotte Transportation Center (CTC) on Trade Street to
Presbyterian Hospital at Hawthorne Lane and Fifth Street
CityLYNX Gold Line Phase 1, currently under construction, will provide a 1.5-mile route from
the Charlotte Transportation Center (CTC) on Trade Street to Presbyterian Hospital at
Hawthorne Lane and Fifth Street. The 1.5-mile alignment will have six stops, including a
connection to the LYNX Blue Line.
Attachment 1 shows the CityLYNX Gold Line Phase 1 Alignment.
CityLYNX Gold Line Phase 1 will utilize the City’s three existing Gomaco replica trolley
vehicles with a passenger capacity of 66 passengers each; however, these will be replaced
with modern vehicles in Phase 2. The Gomaco cars are being used because they were
already part of CATS vehicle fleet and with minor modifications can be ready to operate
1
when passenger service for the 1.5 mile CityLYNX Gold Line Phase 1 begins in March 2015.
Using modern rail cars on Phase 1 would have increased costs and delayed the project;
however, they are considered appropriate for the longer system. The City is particularly
interested in considering the use of emerging hybrid technology. Use of the replica vehicles
on Phase 1 provides time for the hybrid technology to evolve before larger investment
decisions have to be made.
Total funding for Phase 1 is $36.99 million, including a $24.99 million Federal Transit
Administration Urban Circulator Grant and a $12.0 million City match from the General
Capital Investment Fund through Pay-As-You-Go funds and debt-supported Certificates of
Participation (COPs). Operating costs of $1.5 million per year beginning in FY2015 will be
paid through the General Capital Pay-As-You-Go Fund.
CityLYNX Gold Line Phase 2 Proposed
East: From Presbyterian Hospital at Hawthorne Lane and Fifth Street to Sunnyside Avenue
at Hawthorne Lane
West: from Charlotte Transportation Center (CTC) on Trade Street to French Street at
Beatties Ford Road
Phase 2 is the focus of this report and extends the Phase 1 segment by 2.5 miles, creating
an interim system for 4 miles. CityLYNX Gold Line Phase 2 will extend west from Charlotte
Transportation Center to French Street (2.0 miles) and east along Hawthorne Lane from
Presbyterian Hospital to Sunnyside Avenue (0.5 miles).
With the completion of CityLYNX Gold Line Phase 2, the system will shift to seven new
modern streetcar vehicles with an option to use hybrid technology. With these modern
streetcar vehicles, the CityLYNX Gold Line will provide enhanced customer service, comfort,
and quality, and will add passenger volume capacity and shorten dwell times, reducing the
impact on other vehicular traffic. The new vehicles will provide ADA-compliant level
boarding at all stops and each will have the capacity to carry a total of 160 passengers – 60
seated and 100 standing.
This 2.5-mile alignment will have eleven stops. The combined phases of 4-miles will
connect the Charlotte Transportation Center and the Blue Line with the proposed Gateway
Station that will service the proposed LYNX Charlotte Transportation Center, Red Line,
Greyhound, and future Amtrak service.
Major institutions and attractions within a quarter mile of CityLYNX Gold Line with
completion of Phase 2 include:
•
Central Piedmont Community College
•
UNC Charlotte Uptown Campus
•
Time Warner Cable Arena
•
Novant Health Presbyterian Medical Center (Presbyterian Hospital)
•
Johnson C. Smith University
•
Wake Forest Uptown Campus
•
Johnson & Wales University
•
Charlotte-Mecklenburg Government Center
In addition, approximately 2,000 small businesses will be accessible from the CityLYNX
Gold Line.
2
Attachment 2 shows the CityLYNX Gold Line Phase 2 alignment and the location of small
businesses along the alignment.
Total funding needed for the CityLYNX Gold Line Phase 2 includes $126.0 million for capital
construction and $3.3 million per year for annual operations and is discussed further below.
CityLYNX Gold Line Post Phase 2.
With the completion of Phase 2, an additional 6 miles of the system can be initiated in
appropriate phases. The project would extend west to Rosa Parks Community Transit
Center on Beatties Ford Road and east to Eastland Community Transit Center on Central
Avenue. These segments offer some of the greatest potential for economic development
and return on the transit investment. However, the rail system cannot reach these areas
without first completing Phase 2.
Recommendations to Advance CityLYNX Gold Line Phase 2
As described above the CityLYNX Gold Line is an integral part of the city’s economic
planning. Its implementation was started in 2004 with the beginning of conceptual
engineering, with a goal of completion in 2030, using a phased approach. To achieve the
2030 goal, it will be necessary to aggressively pursue each phase of the project. If
recommendations in this report are accepted, Phase 2 will not be operational until at least
2019. It will have taken 15 years to complete the first 4.0 miles of the system, leaving
another 6 miles of construction. Only through continuous construction of the project will the
benefits be fully realized: economic development and enhanced transportation system, both
of which are described below.
Economic Development and Growth
BAE has completed an Economic Development Update Study on the CityLYNX Gold Line,
projecting the economic impact. The details of the study will be presented to City Council’s
Economic Development Committee on May 16th. Highlights from their study show the
following:
•
1.1 million or more square feet in new development:
o 731 additional residential units
o 21,800 square feet of additional retail space
o 276,700 square feet of additional office space
o 101 additional hotel rooms
•
Increase in incremental property tax revenues could range from $4.7 million to
$7.0 million per year by 2035.
By providing a permanent transit infrastructure, the CityLYNX Gold Line will facilitate
economic development revitalization opportunities to achieve the above projections. As
widely noted, Charlotte has little opportunity to grow in the future through annexation. The
city’s future is now tied to strategic redevelopment of appropriate sites into transit oriented,
mixed-use development at population densities greater than patterns of earlier years.
Strategic redevelopment opportunities exist in the following areas to be served by Phase 2
of the CityLYNX Gold Line:
•
•
•
•
•
•
Elizabeth Avenue Business Corridor
Beatties Ford Road Business Corridor
Gateway Village
Seversville
Smallwood
Biddleville
3
•
•
•
•
Johnson C. Smith University
Johnson & Wales University
Central Piedmont Community College
Novant Health Presbyterian Medical Center (Presbyterian Hospital)
Transit also supports the economic sustainability of major uptown institutions and
commercial developments, encouraging their retention and expansion in Charlotte.
It is important to note, that as transit facilitates investment for redevelopment, it is equally
important to preserve traditional neighborhoods that provide single-family options to people
with a wide range of incomes. Sidewalk connections from these neighborhoods should lead
to transit centers and, via transit, provide residents with access to activity centers across
the city. This balance between redevelopment and preservation will require close,
collaborative work by the city with the affected community residents, neighborhood
businesses, and potential investors.
Enhanced Transportation System
The full implementation of the CityLYNX Gold Line serves as the backbone for connecting
the entire 2030 Corridor System Plan together. All rapid transit lines - the Blue Line, Red
Line and Silver Line - are designed to arrive at one of two uptown transit centers and
through the CityLYNX Gold Line service, customers will move seamlessly from one area of
Mecklenburg County to the other.
Only the CityLYNX Gold Line service is designed to connect three of the four current CATS
transit centers and the planned Charlotte Gateway Station. Once completed, residents and
visitors will hop on a neighborhood shuttle service to a neighborhood transit center to ride
the CityLYNX Gold Line service transporting them to the Blue Line and later the Red Line, as
well as hundreds of points throughout Mecklenburg County. In addition, as the CityLYNX
Gold Line transverses through neighborhoods people are able to connect to the more than
2,000 small businesses currently operating along the proposed line.
It is recommended that CityLYNX Gold Line, as an integral part of the region’s overall transit
plan, be submitted to the Metropolitan Transit Commission for endorsement consistent with
the 2030 Transit Plan.
Consideration of the CityLYNX Gold Line should be evaluated in the context of
recommendations from the Transit Funding Working Group, which will be presented to the
MTC on May 22, 2013. The Transit Funding Working Group has developed recommendations
related to:
• awareness of the funding challenges facing the completion of the 2030 Transit Plan;
and
• a set of funding and financing recommendations and tools for the MTC to advance
the 2030 Transit Plan.
The recommendations in this report are intended to move forward with the CityLYNX Gold
Line consistent with any recommendations from the Transit Funding Working Group. The
goal is to leverage funding opportunities and support the overall transit system plan without
conflicting with any MTC policy goals or Transit Funding Working Group recommendations.
The City’s funding contribution represents a dedicated source for the local match for any
federal grant or loan dollars CATS would receive for the CityLYNX Gold Line.
4
Funding Framework: Overall Proposal of 50-50 Federal and Local Split
The estimated total capital funding of $126.0 million will be needed to construct the 2.5 mile
CityLYNX Gold Line Phase 2. In staff’s assessment, the CityLYNX Gold Line would be highly
competitive in an application for federal funds. Given anticipated future constraints on
federal funding, it is strongly recommended that Charlotte make an aggressive effort to
secure federal funding while it is available. This opportunity provides the compelling reason
to advance this element of the overall transit plan at this time.
The City’s Local match could come from a variety of sources that include existing available
debt capacity and Pay-As-You-Go balances in the General Capital Investment fund. Further
explanation of the potential federal grants and loans and City funding is provided below.
It is important to note that cost projections are based on current estimates. The $126.0
million estimated capital cost will need to be escalated and the ultimate cost will be higher
depending on when approvals are granted. The longer it takes to start the project, the
more it will cost. On an annual basis, it will be necessary to recalculate estimates based on
changing costs related to acquisition of cars and equipment as well as construction costs.
Normally, it is expected that costs will escalate overall between 4.75% for roadway
construction components and 6.30% for steel, rail, shelters, and vehicles.
Federal Grants. The following federal grants could potentially be obtained to fund 50% of
the capital cost for the CityLYNX Gold Line Phase 2. Staff will assess the requirements and
restrictions applicable to each of these funding options to determine the most viable funding
approach for the CityLYNX Gold Line. Additionally, these federal grant programs must
reconcile with any recommendations put forward by the Transit Funding Working Group.
Transportation Investments Generating Economic Recovery (TIGER) Grant: TIGER grants
are provided through the U.S. Department of Transportation’s National Infrastructure
Investment Grant Program and fund highly competitive, innovative infrastructure
programs that are difficult or impossible to fund through other federal programs. TIGER
V applications must be submitted by June 3, 2013 and if approved, funds must be
obligated by September 2014.
Federal Transit Administration New Starts Grants: New Starts provides funds for
construction of new fixed guideway systems or extension to existing fixed guideway
systems. This grant has a defined process for qualifying to receive funding. The process
for previous New Starts grants typically took five to seven years from Preliminary
Engineering to a Full Funding Grant Agreement (FFGA). Under new regulations the
process may be shortened to five years.
Federal Transit Administration Small Starts Grants: Funds for capital projects that either
(a) meet the definition of a fixed guideway project for at least 50% of the project length
in the peak periods or (b) are corridor based with 10 minute peak/15 minute off peak
headways or better. Federal grants must be ≤$75 million and project must have a total
capital cost of < $250 million.
Although it may depend on how the applications for the various grants are structured, there
appear to be no formal restrictions to applying for more than one grant or federal loan to
fund the CityLYNX Gold Line Phase 2, although if the project is awarded a New Starts grant
it could become less competitive for a TIGER grant.
City Local Match: Non-Property Tax Capital Funding. Capital funding to cover the City’s
50% contribution to the costs for the CityLYNX Gold Line Phase 2 would come from the use
of unallocated and contingent capital accounts within the revenue sources other than
property taxes. None of the 3.17-cent recommended increase in the property tax for the
FY2014-FY2018 Capital Improvement Program would be used for the CityLYNX Gold Line.
5
Reallocation Sources. As noted, the local match would come from existing resources that
are mostly unallocated or that serve as contingency funds. Were there not the opportunity
to attract significant federal funding for this previously approved project, staff would
recommend leaving these funds in contingency for other opportunistic efforts and to provide
a wide margin of safety for unanticipated events or costs on other projects. Table 1 lists the
sources proposed for reallocation.
Table 1
City Match Reallocation Recommendations
Existing Debt Capacity
Unallocated debt capacity
$
25,000,000
Reserve for Economic Development Initiatives
5,000,000
Transportation Capital Project Savings
9,670,573
Existing Pay-As-You-Go Capital
Business Corridor Revitalization
(Current Balance, Unallocated)
13,377,678
Capital Reserve
5,325,200
Facilities Capital Project Savings
2,274,658
Future Road Planning & Design
(Current Balance, Unallocated)
2,000,000
Economic Development Loan And Grant Fund
Total City Capital Funding
351,891
$
63,000,000
Staff has reviewed the potential impacts on the capital program if these funding sources are
used for the CityLYNX Gold Line, and conclude that there will be no significant impacts to
other Capital Investment Plan projects or programs. It is true that there are opportunity
costs: if the funds are used for CityLYNX Gold Line, they obviously are not available for
other projects; however, no specific projects are being de-funded or delayed by this
recommendation.
No Property Taxes. The above sources for the local match are funded in the Municipal
Debt Service Fund and the Pay-As-You-Go fund in the General Capital Investment Plan. The
Municipal Debt Service Fund is supported by several revenues, including property tax, sales
tax, and interest on investments. The Pay-As-You-Go Fund is similarly supported by a
variety of revenues including property tax, sales tax, vehicle rental tax, and sale of City
land. While a specific property tax rate is allocated to both funds, property taxes comprise
only a portion of capital funding, based on an analysis of both funds over the past five
years:
83.8% for the Pay-As-You-Go Fund is from sources other than property tax
43.7% of the Municipal Debt Service Fund is from sources other than property tax
Tables 2 and 3 below show the relative share of property tax revenue and non-property tax
revenue for the past five years supporting the General Capital Investment Pay-As-You Go
Fund and the Municipal Debt Service Fund.
6
Table 2
Total Revenue $
Property Tax Revenue
Non-Property Tax Revenue
% Non-Property Tax Revenue
General Capital Investment Pay-As-You-Go Fund
FY09
FY10
FY11
FY12
FY13
5-Year Average
71,409,191 $ 96,045,668 $ 58,341,584 $ 61,247,099 $
46,555,537 $
66,719,816
10,825,677
10,411,384
9,425,588
9,860,583
10,551,366
10,214,920
60,583,514
85,634,284
48,915,996
51,386,516
36,004,171
56,504,896
84.8%
89.2%
83.8%
83.9%
77.3%
83.8%
Total Non-Property Tax Revenue Over 5 Years $ 282,524,481
Table 3
Municipal Debt Service Fund
FY09
FY10
FY11
FY12
Total Revenue $ 104,139,853 $ 90,936,443 $ 94,318,148 $ 93,808,426 $
Property Tax Revenue
52,837,906
50,727,810
52,211,300
54,227,588
Non-Property Tax Revenue
51,301,947
40,208,633
42,106,848
39,580,838
% Non-Property Tax Revenue
49.3%
44.2%
44.6%
42.2%
Total Non-Property Tax Revenue Over 5 Years $
FY13
5-Year Average
91,581,238 $
94,956,822
56,471,172
53,295,155
35,110,066
41,661,666
38.3%
43.7%
208,308,332
Based on this analysis, staff has concluded that the City’s $63 million local share is well
within an amount that can come from the non-property tax revenues of sales tax, interest
on investments, vehicle rental tax, and other non-property tax revenue. Property tax
revenues in these two funds will continue to be used to support traditional Pay-As-You-Go
and debt-supported general capital investment programs.
The actual financing of the CityLYNX Gold Line will require a combination of the City’s usual
approaches using bonds and Certificates of Participation. Additionally, the city will explore
federal capital funding using the Transportation Infrastructure Finance and Innovation Act
(TIFIA). TIFIA loans leverage federal resources and stimulate private capital investment in
transportation infrastructure by providing credit assistance to projects of national or regional
significance. A local government can apply for TIFIA loans for more than one project.
Operating Funding
Annual operating cost in the first year of operation is estimated to be $3.3 million to support
vehicle operations, basic equipment maintenance, and safety and security. An additional
approximately $1.0 million per year will be required to build a capital maintenance reserve
to perform regular vehicle overhauls every five years and mid-life overhauls every 15 years.
Funding for operations of the CityLYNX Gold Line will be provided from a variety of sources
including ridership fares, advertising, naming rights, and potentially some form of propertybased value capture revenue from sources such as Tax Increment Financing (TIF) districts,
Special Assessment Districts (SADs), or Municipal Service Districts (MSDs). These funds will
not be needed until 2019 at the earliest. The city will continue to work with the
Metropolitan Transit Commission for new sources of transit funding. If we are not
successful in expanding funding, the City will need to incorporate the operating costs of the
CityLYNX Gold Line into its budget by FY2020.
Next Steps
•
May 16: BAE study presented at Economic Development Committee
•
May 22: Metropolitan Transit Commission (MTC) reviews and endorses City
Manager Recommendation on CityLYNX Gold Line Phase 2 and receives report from
the Transit Funding Working Group
•
May 28: Possible Council action
7
Attachment 1
CityLYNX Gold Line Alignment
8
Attachment 2
CityLYNX Gold Line
Connecting to Small Businesses/Employment, Education, Cultural and Sports
9
5/13/2013
CityLYNX Gold Line
Recommendation
May 13, 2013
Introduction
• April 2013 Mayor and Council authorized Manager
to review and analyze streetcar project
• Manager’s review included:
–
–
–
–
–
–
Scope and cost
Alignment
Policy rationale
Connection to transit policies
Communications and marketing
Funding options
• Recommend moving forward but with several
changes in approach
2
1
5/13/2013
Rationale:
Integral Part of 2030 Transit Plan
CityLYNX Gold Line:
• Aligns with other transit projects:
–
–
–
–
Blue Line
Red Line
Silver Line
Bus service
• Connects Red Line at Gateway Station to Blue
Line at Charlotte Transportation Center
• Included in Metropolitan Transit Commission plan
since 2002 and reaffirmed in 2006
3
Rationale:
Integral Part of 2030 Transit Plan
Backbone of CATS rapid transit system:
– Connects all rapid transit lines to each other
– Connects Intercity rail/bus to city and region
– Connects all rapid transit lines to the Airport
– Connects neighborhood and Center City transit centers
– Connects neighborhoods to Center City and major activity
centers in Mecklenburg County
4
2
5/13/2013
Rationale:
Integral Part of 2030 Transit Plan
5
Rationale:
Economic Development
CityLYNX Gold Line:
• Spur growth along the corridor which is expected
to broaden local tax base within the corridor over
the next 25 years
• BAE study indicates:
– 1.1 million or more square feet in new development:
• 731 additional residential units
• 21,800 square feet of additional retail space
• 276,700 square feet of additional office space
• 101 additional hotel rooms
– Increase in incremental property tax revenues could
range from $4.7 million to $7.0 million per year by 2035.
6
3
5/13/2013
Rationale:
Economic Development
CityLYNX Gold Line:
• Is an economic development tool to help promote
growth and development
• Without annexation, future tied to strategic
redevelopment with transit-oriented, mixed use
development with greater densities
• Supports sustainability of uptown institutions and
businesses, thus encouraging retention and
expansion
7
Connecting Small Businesses/Employment, Education, Cultural and Sports
French Street
Sunnyside Avenue
4
5/13/2013
Rationale:
CONNECTING to cultural venues
French Street
Discovery Place
Bechtler Museum
ImaginOn
Mint Museum
Sunnyside Avenue
Gantt Center for
African-American Arts + Culture
9
Rationale:
CONNECTING to sporting venues
French Street
Time Warner Cable Arena
BB&T Ballpark
Bank of America Stadium
Sunnyside Avenue
NASCAR Hall of Fame
10
5
5/13/2013
Rationale:
CONNECTING to transportation
French Street
Future Intercity Rail
Intercity Bus
Charlotte
Transportation Center
Sunnyside Avenue
11
Rationale:
CONNECTING to education
French Street
JC Smith University
Wake Forest University
Johnson & Wales
University
UNC Charlotte
Uptown Campus
Northeastern University
CPCC
Sunnyside Avenue
12
6
5/13/2013
Policy groups & discussions
Metropolitan Transit Commission
& Transit Funding Working Group
13
Branding
• It’s About Connecting:
Linking neighborhoods
Linking to employment opportunities
Linking to education opportunities
Linking to small businesses
Linking to health care
Linking to cultural venues
Linking to sporting venues
Linking to transportation choices
Linking to all the amenities a city and region have to offer.
14
7
5/13/2013
15
Branding
16
8
5/13/2013
Branding
17
18
9
5/13/2013
CityLYNX Gold Line – Phase 1
• Alignment
– 1.5 mile route from the
Charlotte Transportation
Center (CTC) on Trade
Street to Presbyterian
Hospital; utilizes a half
mile of existing track on
Elizabeth Avenue
– Includes 6 stops
CTC/Arena
– Includes a connection to
the LYNX Blue Line for
system flexibility and
access to existing
maintenance facility
Presbyterian
Hospital
19
CityLYNX Gold Line – Phase 1
• Cost
– Estimated cost is $37 million
– In July 2010, the FTA awarded the City $24.99 million
from the Urban Circulator Grant to construct the first
operational segment of the proposed 10-mile streetcar
project.
– $12 million from City funds (Pay-As-You-Go/Debt Service)
20
10
5/13/2013
CityLYNX Gold Line – Phase 1
21
CityLYNX Gold Line – Phase 2
(Proposed)
• Alignment
French Street
– Extend the CityLYNX
Gold Line - Phase 1
by 2.5 miles
– Includes 11 stops
– Includes upgrades to
the North Yard
maintenance facility
to accommodate the
new vehicles and
modifications to the
existing 6 stops to
accommodate the
modern vehicles
Sunnyside Avenue
22
11
5/13/2013
CityLYNX Gold Line – Phase 2
(Proposed)
• Cost
– Estimated cost is $126 million (assumes FY14 start)
• Timeline
– The project would take 5 years from beginning of design
to operational service
Given the potential timing for federal funding, it is probable
that the project will take longer and cost more.
23
CityLYNX Gold Line – Phase 2
(Proposed)
24
12
5/13/2013
Funding Framework
CityLYNX Gold Line – Phase 2
Capital funding for $126 million:
• 50% from federal grants
– FTA New Starts/Small Starts Grants
– Transportation Investments Generating Economic Recovery
(TIGER) grants, through U.S. DOT’s National Infrastructure
Investment Grant Program
• 50% from City: Local Match
– Existing available debt capacity
– Existing Pay-As-You-Go balances in the General Capital
Investment fund
• Transportation Infrastructure Finance and
Innovation Act (TIFIA) loans
– Potential lower cost-of-funds than typical debt financing
25
Funding Framework
CityLYNX Gold Line – Phase 2
• 50% Local Match - $63.0 million
– Use of Existing Debt Capacity
• Unallocated debt capacity - $25.0 million
• Reserve for Economic Development - $5.0 million
• Transportation Project Savings - $9.7 million
– Use of Existing Pay-As-You-Go Capital
•
•
•
•
•
Business Corridor Revitalization - $13.4 million
Capital Reserve - $5.3 million
Facilities Project Savings - $2.3 million
Future Road Planning & Design - $2.0 million
Economic Development Loan and Grant Fund - $0.3 million
26
13
5/13/2013
Funding Framework
CityLYNX Gold Line – Phase 2
• Operating Funding
– Estimated at $3.3 million annually for vehicle
operations, basic equipment maintenance, and
safety and security
– Funding options include:
•
•
•
•
Ridership fares
Advertising
Naming rights
Property-based value capture revenue such as:
– Tax Increment Financing (TIF) districts;
– Special Assessment Districts (SADs); and/or
– Municipal Service Districts (MSDs)
– Operating funds needed no earlier than FY2019
27
Next Steps
• May 16:
– BAE Study presented at Economic Development
Committee meeting
• May 22:
– Metropolitan Transit Commission review and
endorsement of CityLYNX Gold Line recommendations
– Metropolitan Transit Commission receives report from
Transit Funding Working Group
• May 28:
– Possible Council action
28
14
5/13/2013
Questions?
29
15
bae urban economics
Charlotte CityLYNX Gold Line Project:
Economic Development Update Study
Submitted to the City of Charlotte
May 10, 2013
KEY FINDINGS
This Study is an update of the BAE Urban Economics (BAE) 2009 Charlotte Streetcar Economic
Development Study (2009 Study) to inform consideration of a potential CityLYNX Gold Line Phase 2
extension to the initial 1.5 mile CityLYNX Gold Line Phase 1 project now under construction. Phase 1
of the CityLYNX Gold Line will run from the Charlotte Transportation Center, eastward along East
Trade Street onto Elizabeth Avenue, ending at Hawthorne Lane, and is expected to commence
operation in 2014.
The two key topics addressed in this Study are:
•
What are the added economic development benefits from the CityLYNX Gold Line Phase 2?
•
What are the potential new fiscal revenues from the Phase 1 and Phase 2 CityLYNX Gold Line
projects that could be used to help finance CityLYNX Gold Line Phase 2?
Phase 2 of the CityLYNX Gold Line totals 2.5 miles with two separate segments: a west extension
from the Charlotte Transportation Center along West Trade Street to Beatties Ford Road and up to
Johnson C. Smith University; and an east extension from Presbyterian Hospital, northward along
Hawthorne Lane to Sunnyside Ave. For this Study it is assumed that Phase 2 of the CityLYNX Gold
Line would commence operation in 2020. Figure 1 shows Phase 1 and Phase 2 of the CityLYNX Gold
Line, and their relationship to the entire 10 mile Gold Line corridor analyzed in the 2009 Study:
F IGURE 1: C ITY LYNX G OLD L INE , 10- MILE CORRIDOR , P HASE 1 AND P HASE
2
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
1
Additional Economic Development Benefits
Based on updated market projections, the Phase 2 CityLYNX Gold Line when compared to a “no Gold
Line” scenario with existing bus service, would result from 2015 to 2035 in a total of 731 additional
residential units; 21,800 square feet of additional retail space; 276,700 square feet of additional
office space; and 101 additional hotel rooms, as shown in Table 1. This represents an increase of
approximately 1.1 million or more square feet in new development. The comparison includes the
period 2015 through 2020, even though Phase 2 of the CityLYNX Gold Line would not be in
operation until 2020, since potential financing tools under consideration could utilize fiscal revenues
from new development from 2015 through 2020.
T ABLE 1: P ROJECTED A DDITIONAL D EVELOPMENT FROM
C ITY LYNX
G OLD L INE P HASE 2, 2015- 2035
Extension Corridor
Residential Units
Retail SF
Office SF
Hotel Rooms
No Gold Line
Scenario (a)
1,189
56,153
362,479
288
Expected Scenario
with Gold Line (b)
1,920
77,953
639,207
389
Change /
Increase
731
21,800
276,729
101
Notes:
(a) Based on "no streetcar" development projections from 2009 BAE report, as
adjusted based on observed market trends since 2009.
(b) Based on MUMPO 2013 projections and analysis of Gold Line corridor trends.
Sources: BAE, 2009; MUMPO, 2013; BAE, 2013.
The increase in development would occur because Phase 2 of the CityLYNX Gold Line would increase
homebuyer, renter, and commercial tenant demand for locations along the Gold Line corridor, and
motivate developers to invest in additional development. Additional information on the market
analysis and demand projections for both Phase 1 and Phase 2 of the CityLYNX Gold Line are
contained in the Market Analysis section of this Study.
New Fiscal Revenues
Tax Increm ent Finance Revenues
The new fiscal revenue analysis considers the increase in property tax revenues from Phase 1 of the
CityLYNX Gold Line starting in 2015, the first full year after it commences operation, and the earliest
date a potential Tax Increment Finance (TIF) district, or additional charge to existing and new
Municipal Service District (MSD) districts, could be established. The new fiscal revenues from Phase
2 of the CityLYNX Gold Line are assumed to be collected starting in 2015, the earliest a TIF district
for the Phase 2 area could be established, although Phase 2 Gold Line operations would be
projected to commence in 2020.
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
2
The boundaries of a new TIF district, or addition to an existing MSD or creation of a new MSD, are
calculated to include properties within the ¼-mile radius on either side of the Gold Line routes. The
resulting corridor contains those properties that will see the greatest direct benefit from the Gold
Line, and are likeliest to experience an increase in land value, sales prices, or rents due to greater
demand from homebuyers and tenants (although a corridor “value premium”, estimated at up to five
percent based on research of the value impacts of other light rail transit in the US, is excluded from
this analysis).
A new TIF District that starts with a 2015 baseline and covers both Phase 1 and Phase 2 of the
CityLYNX Gold Line has been analyzed. Such a TIF District would be the first one created in the City
pursuant to the State law authorizing such districts. It would allocate only the net increase in
assessed value and increase in real property tax revenues from new development and
improvements to existing properties. There would be no new revenues from existing development,
and no additional taxes paid by existing property owners who do not develop their properties.
The TIF District is projected to see an increase in assessed values starting from a baseline of $0 in
2015 and growing to $561 million in 2020 and ultimately $2.35 billion in 2035. The resulting
annual TIF revenue would grow from $0 in 2015 to $2 million by 2020, and then decrease slightly
through 2025 and 2030 due to previous commitments to the Elizabeth Avenue Tax Increment Grant
(TIG). Once the TIG has been repaid, annual TIF revenues would increase to $5.5 million by 2035, as
shown in Table 2. These figures do not include the anticipated TIF revenues generated by the
Redline/Gateway Station Project, which is projected to grow to $2.7 million by 2035.
T ABLE 2: TIF R EVENUES , E XPECTED S CENARIO
Year
2020
2025
2030
2035
Increment: Change in
Assessed Value (a)
$
560,704,555
$
1,121,409,109
$
1,752,930,422
$
2,354,133,419
Existing
TIF Rate
0.4370%
0.4370%
0.4370%
0.4370%
$
$
$
$
Annual
Gold Line TIF
Revenue (b)
1,960,223
1,718,598
1,724,548
5,497,176
Notes:
(a) Increment represents the cummulative change in assessed value
since 2015 in each year.
(b) Represents only the 80% of available tax increment attributable to
real property, less tax increment allocations to the Elizabeth Ave
project from 2020 to 2030 and to the Gateway Station project
from 2020 and on.
Sources: Mecklenburg County, 2012; City of Charlotte, 2013; BAE, 2013.
M unicipal Service District (M SD) Revenues
There are currently three MSDs in the Uptown and Midtown areas that include parts of the Phase 1
and Phase 2 CityLYNX Gold Line corridors. For this Study it is assumed that either the boundaries of
these MSDs are extended and/or new MSDs are created so that all properties within the Phase 1
and Phase 2 CityLYNX Gold Line corridors would be located within an MSD. An MSD tax rate of 0.02
percent is assumed throughout the Gold Line corridors (as an additional charge for existing MSDs).
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
3
Unlike TIF, the MSD tax rate would apply to the full assessed value of all properties within the MSD,
not just the increase in value from new development.
Table 3 shows that the potential additional receipts from MSD for the properties in the Phase 1 and
Phase 2 CityLYNX Gold Line corridors. Gold Line-related MSD revenues would grow to $1.2 million in
2020; $1.31 million in 2025; $1.44 million in 2030; and $1.56 million in 2035. Properties in the
Phase 2 Gold Line corridor that are not in any existing MSD would contribute only $160,000 per year
of the $1.6 million in revenues by 2035.
T ABLE 3: N EW M SD R EVENUES FROM P HASE 1 AND
P HASE 2 C ITY LYNX G OLD L INE – E XPECTED
S CENARIO
Year
2020
2025
2030
2035
$
$
$
$
Total Assessed
Value
5,995,481,606
6,556,186,160
7,187,707,473
7,788,910,470
Gold Line
MSD Rate
0.0200%
0.0200%
0.0200%
0.0200%
Annual
Gold Line MSD
Revenue (a)
$
1,199,096
$
1,311,237
$
1,437,541
$
1,557,782
Notes:
(a) Total streetcar MSD revenue from all parcels within the 4-mile
corridor, including parcels where no MSD currently exists. The
contribution from these parcels in 2035 is $160,000 of the total
projected MSD revenue for that year.
Sources: Mecklenburg County, 2012; BAE, 2013.
Additional information on the calculation of TIF revenues and MSD, and issues related to its use, are
contained in the Fiscal Analysis section of this Study.
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
4
STUDY APPROACH
The update in this Study builds upon the previous 2009 Study, which contains a comprehensive
analysis of the proposed 10 mile route for the Charlotte CityLYNX Gold Line, and includes a literature
review of studies on value premiums created by transit; financing options for transit systems; case
studies of other streetcar systems; and an economic analysis for the entire 10 mile Gold Line
corridor.
The 2009 Study evaluated four market areas along the CityLYNX Gold Line corridor (West, Uptown,
Midtown, and East). It projected development with no Gold Line (bus service only) versus two
scenarios for a Gold Line (a baseline scenario and an accelerated scenario based on a shift in the
market leading to more development along the corridor). The economic analysis projected new
development from 2010 to 2035, and identified the resulting growth in General Fund property tax
revenues, and potential revenues from a Tax Increment Finance district, as well as from an additional
rate for the existing Municipal Service Districts (MSD).
ARKET
A REAS
FOR Map,
THE2008
10- MILE G OLD L INE
F IGURE 2: 2009 S TUDY MMap
2: Streetcar
Segment
C ORRIDOR
December 2008
9
Source: Warren & Co.
This update for Phase 1 and Phase 2 of the CityLYNX Gold Line involves evaluation of revised market
and long-term growth projections for the West, Uptown, and Midtown market areas (the East market
area of the corridor would not be served by Phase 2 of the Gold Line; the West and Midtown market
areas are only partially served). The updated development projections were used to update
calculations of the value of new development from 2015 through 2035 for Phase 1 of the CityLYNX
Gold Line corridor. The value of new development for the Phase 2 Gold Line corridor through 2035
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
5
was calculated from 2015 based on an updated no Gold Line scenario, and from 2020 the
calculation includes the greater development resulting from Phase 2 of the Gold Line, the first year
that Phase 2 is assumed to commence operations. The calculations of new development value were
used to project potential fiscal revenues, based on current property tax rates, as well as an assumed
addition to MSD rates and boundaries, as outlined in the following sections.
MARKET ANALYSIS
During the recent recession, from 2009 to 2011, Charlotte experienced a net increase in jobs of six
percent; total employment from 2007 through 2011 saw a net increase of 11 percent. At the end of
2011 total employment in the Charlotte region was 50,000 jobs higher than in the pre-recession
year of 2007. While unemployment in Charlotte and the region remains above the national average,
this is due in part due to a considerable influx of population in recent years. New development has
continued during the past several years in the Uptown and near Midtown market areas of the Gold
Line corridor, and substantial amounts of new development are now underway in the South End
along the Lynx Blue Line, and in South Park. Continued job growth and development activity
indicates that Charlotte is well positioned for strong growth in the near-term and longer-term.
For this update, new Mecklenburg-Union Metropolitan Planning Organization (MUMPO) 2013
projections were used to project new development starting in 2015. MUMPO is updating its
economic model for future growth in population, households, and jobs through 2035, and as of the
date of this Study had only released updated projections for Mecklenburg County as a whole. A full
set of updated projections, including for the market areas along the Gold Line corridor, are expected
to be released soon.
Comparing MUMPO’s 2013 projections for Mecklenburg County’s growth from 2015 through 2035,
versus the previous 2005 projections, shows that MUMPO now expects a 14 percent greater
increase in household growth (the prime driver for residential development), but a 41 percent
decrease in job growth (or 131,600 fewer jobs). The decline in new jobs appears – pending review of
more detailed data when available – to potentially arise from a lowering of previous extraordinary
assumptions for future job growth, as well as an assumption that future job growth would be more
dispersed throughout the region (if so, this reinforces the importance of Charlotte’s Centers,
Corridors, and Wedges development framework and the use of rail transit capture and organize
future growth in a manner that provides the greatest benefits for the City).
Appendix A to this Study provides a comprehensive set of market tables used for the analysis, along
with a detailed discussion of the market analysis methodology.
Updated Development Projections: CityLYNX Gold Line Phase 1
For comparison purposes, the updated MUMPO projections, as well as analysis by BAE of current
employment, development trends and projects, were matched to the 2009 Study baseline scenario
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
6
for the Phase 1 CityLYNX Gold Line corridor to show how future development along the corridor may
change from the 2009 projections. Table 4 provides a breakdown of development, by phase, market
area, and land use for the Phase 1 Gold Line corridor starting in 2015. It shows that compared to the
2009 figures, the revised 2013 projections for new development resulting from Phase 1 of the Gold
Line include 990 additional residential units and 205,000 square feet of additional retail. However,
office space is projected to decrease by roughly 176,000 square feet and lodging by 62 rooms. This
is primarily due to MUMPO’s reduction in projected job growth through 2035 in Mecklenburg County,
and its resulting impact on the Uptown market area (and throughout the City).
The divergent trends of an increase in future population with a reduction in future employment
results in a net increase in development of approximately 1.1 million square feet for Phase 1 of the
CityLYNX Gold Line compared to the 2009 projections. The largest share of the increase in
residential and retail space is due to current plans by Grubb Properties for development of sites in
collaboration with Novant along Elizabeth Avenue.
T ABLE 4: P ROJECTED D EVELOPMENT 2015 – 2035,
2009 S TUDY VS . 2013 U PDATED P ROJECTIONS
2009 Study
Streetcar Baseline
Uptown Phase 1
Residential Units
Retail SF
Office SF
Hotel Rooms
Midtown Phase 1 (b)
Residential Units
Retail SF
Office SF
Hotel Rooms
Total Phase 1 Corridor
Residential Units
Retail SF
Office SF
Hotel Rooms
2013 Update
Expected Scenario (a)
2,950
126,565
1,593,764
535
2,901
132,926
1,154,774
422
421
23,735
98,150
26
1,460
222,487
361,487
77
3,371
150,300
1,691,914
560
4,361
355,413
1,516,260
498
Change
(48)
6,361
(438,990)
(113)
1,039
198,751
263,337
51
990
205,112
(175,653)
(62)
Notes:
(a) Based on MUMPO 2013 projections and analysis of Gold Line corridor trends.
(b) Midtown corridor projections include development program for the Elizabeth Avenue
project that was not included in 2009 projections.
Sources: BAE, 2009; MUMPO, 2013; BAE, 2013.
Development Projections: CityLYNX Gold Line Phase 2
Since a decision has not been made on whether to proceed with Phase 2 of the CityLYNX Gold Line,
a different comparison was made than in the preceding section for Phase 1. The appropriate
comparison for the Phase 2 CityLYNX Gold Line is an update of the 2009 Study “no rail transit”
scenario for the relevant portion of the corridor that incorporates development projects and changes
in market trends since that study was prepared. This updated no Gold Line scenario is then
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
7
compared with the projected development for Phase 2 CityLYNX Gold Line in this Study based on
revised MUMPO projections and current market trends. The comparison is made from 2015 through
2035, even though the projected development is the same in both scenarios for the first five years of
this time period, since TIF and MSD revenues could potentially be collected during this period from
properties in the Phase 2 Gold Line corridor.
Table 5 shows that total projected development from 2015 to 2035 in the Phase 2 CityLYNX Gold
Line corridor, compared to the no Gold Line scenario, would result in an additional 731 residential
units; 21,800 square feet of retail; 276,800 square feet of office space; and 101 hotel rooms.
T ABLE 5: P ROJECTED D EVELOPMENT 2015 – 2035,
“N O G OLD L INE ” VS . P HASE 2 G OLD L INE
No Gold Line
Scenario (a)
Uptown Phase 2
Residential Units
Retail SF
Office SF
Hotel Rooms
805
45,157
346,884
275
Expected Scenario
with Gold Line (b)
1,397
60,656
584,646
305
Change /
Increase
592
15,499
237,762
29
West Phase 2
Residential Units
Retail SF
Office SF
Hotel Rooms
233
3,081
0
0
271
8,098
29,123
47
38
5,016
29,123
47
Midtown Phase 2
Residential Units
Retail SF
Office SF
Hotel Rooms
151
7,915
15,595
12
252
9,199
25,438
37
101
1,284
9,843
25
Total Phase 2 Corridor
Residential Units
Retail SF
Office SF
Hotel Rooms
1,189
56,153
362,479
288
1,920
77,953
639,207
389
731
21,800
276,729
101
Notes:
(a) Based on "no streetcar" development projections from 2009 BAE report, as
on observed market trends since 2009.
(b) Based on MUMPO 2013 projections and analysis of streetcar corridor trends.
Sources: BAE, 2009; MUMPO, 2013; BAE, 2013.
Sensitivity Analysis - Alternative Scenarios
Two alternative market scenarios were developed to test their impact on the development and fiscal
findings of this Study. The first scenario is a Conservative scenario (worst case) that assumes the
Phase 1 and Phase 2 CityLYNX Gold Line corridors grow at a slower rate, i.e. they lose market share
relative to the overall growth in the County equivalent to a loss of market share of just under one
percent. The second scenario is a Best Case scenario that assumes the Phase 1 and Phase 2
CityLYNX Gold Line corridors grow at an even faster rate, i.e. they gain market share relative to the
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
8
County equivalent to a gain in market share of slightly more than one percent. Table 6 compares
expected development in the Phase 1 and Phase 2 CityLYNX Gold Line corridors to the Conservative
and Best Case scenarios.
T ABLE 6: P ROJECTED D EVELOPMENT BY S CENARIO , 2015 - 2035
Conservative
Gold Line Scenario
Expected
Gold Line Scenario
Total Phase 1 Corridor
Residential Units
Retail SF
Office SF
Hotel Rooms
3,841
336,730
1,398,942
456
4,361
355,413
1,516,260
498
Total Phase 2 Corridor
Residential Units
Retail SF
Office SF
Hotel Rooms
1,887
81,922
616,966
368
1,920
77,953
639,207
389
2,326
96,554
695,758
425
5,727
418,652
2,015,908
824
6,281
433,365
2,155,467
887
7,655
485,870
2,418,336
998
Total Phase 1 & Phase 2
Residential Units
Retail SF
Office SF
Hotel Rooms
Best Case
Gold Line Scenario
5,328
389,316
1,722,579
573
Sources: MUMPO, 2013; BAE, 2013.
The fiscal impacts of these alternative scenarios are evaluated in the next section of this Study.
FISCAL ANALYSIS
Appendix B to this Study provides the updated set of detailed fiscal analysis tables that correspond
to the updated CityLYNX Gold Line demand projections identified in this Study. This section outlines
the sensitivity analysis for alternative outcomes of potential fiscal revenues, based on the alternative
demand scenarios in the previous section.
Tax Increment Finance (TIF)
Table 7 shows how tax increment would vary from the Phase 1 and Phase 2 CityLYNX Gold Line
corridors for total development projected by 2035, based on the Conservative, Expected, and Best
Case scenarios outlined in the previous section. This analysis results in the previously identified
Expected scenario estimate of $5.5 million in annual TIF revenues having a potential range from
$4.67 million to $7.0 million.
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
9
T ABLE 7: G OLD L INE T AX I NCREMENT BY SCENARIO , 2035
Increment: Change in
Assessed Value (a)
Scenario
Conservative
Expected
Best Case
$
$
$
2,114,793,760
2,354,133,419
2,793,298,362
Annual
Gold Line TIF
Revenue (b)
Existing
TIF Rate
0.4370%
0.4370%
0.4370%
$
$
$
4,660,445
5,497,176
7,032,497
(a) Increment represents the cummulative change in assessed value as of 2035.
(b) Represents only the 80% of available tax increment attributable to real property,
less tax increment allocations to the Elizabeth Ave project from 2020 to 2030
and to the Gateway Station project from 2020 and on.
Sources: Mecklenburg County, 2012; City of Charlotte, 2013; BAE, 2013.
An alternative for lower or higher sale prices and rental rates was not modeled as such a market
change would have a proportional impact on all three scenarios, and current rental rates likely reflect
a somewhat conservative bias based on the timing of the current market recovery.
It should be noted that while an increase in property values of up to five percent (a rail transit value
premium) can be expected based on the experience of other US cities, this premium is not included
in the fiscal revenue calculations. This is because revenues from an increase in existing land value
(the rail transit value premium) would need to be offset by an adjustment in the City-wide property
tax rate to maintain the revenue neutrality required by State law.
Additional Considerations for Use of TIF
There are several challenges associated with the potential use of TIF revenue to support bonds for
improvements, in addition to any statutory considerations. The most significant challenge with the
use of TIF is that the need to spend money on improvements is up-front but the revenues that are
needed to repay bonds build slowly over time. Bond purchasers want to see a demonstration of
actual revenues that are currently available for debt service, not a projection of future revenues.
There are a variety of ways that other jurisdictions in the US address these challenges, including the
use of credit enhancement, internal fund borrowing, or other techniques. How the City would address
this issue needs to be determined.
Another challenge is that revenues from a TIF District would be set-aside for improvements in that
District, and the increase in revenues above the baseline assessed value would not be available to
the City’s General Fund. This could result in a budget impact if new development spurred by use of
TIF creates a need for increased City services but limits the growth in the General Fund because all
of the new tax revenues are kept within the TIF District. The revenue neutrality required by State law
also means that it is not possible to create a TIF District and capture tax increment revenues from
growth in the values of existing properties that are not developed, without a corresponding reduction
in the property tax rate to offset this additional revenue.
This trade-off is inherent to the use of TIF, and cities around the US have been willing to make this
trade-off if in the long-run the TIF revenues and the improvements it supports and the new
development that results will result in more General Fund revenues than if the TIF improvements
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
10
were not made. Because TIF only captures revenues above a baseline assessed value, it does not
take money away from the current General Fund and its expenditures. The beneficial long-term result
that arises from additional development that TIF helps create and that would not have occurred
without its use, as well as the eventual General Fund growth once TIF bonds are paid off, is a tradeoff that many cities are willing to consider.
Municipal Services District (MSD) Revenues
The analysis of potential additional MSD revenues is based on the three existing MSD districts as
well as an assumption that the boundaries of these districts are expanded and/or new MSDs are
created so that all properties within ¼ mile of either side of the Phase 1 and Phase 2 CityLYNX Gold
Line corridors are included, as shown in Figure 3. This represents those properties most likely to
benefit from an increase in value from the Gold Line.
F IGURE 3: E XISTING M SD S IN P HASE 1 AND P HASE 2 C ITY LYNX G OLD L INE C ORRIDORS
In order to evaluate alternative levels of MSD revenues, a calculation was made based on the
Conservative and Best Case scenarios outlined in the previous section. Table 8 shows the results of
this calculation, with the previously identified estimate of $1.56 million in MSD revenues in 2035
having a potential range from $1.51 million per year to $1.65 million per year.
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
11
T ABLE 8: M SD R EVENUES BY S CENARIO , 2035
Scenario
Conservative
Expected
Best Case
$
$
$
Total Assessed
Value in 2035
Gold Line
MSD Rate
7,549,570,811
7,788,910,470
8,228,075,413
0.0200%
0.0200%
0.0200%
Annual
Gold Line MSD
Revenue in 2035
$
$
$
1,509,914
1,557,782
1,645,615
Source: Mecklenburg County; BAE, 2013.
Another Financing Option – Special Assessment Districts
In 2008, the State legislature approved the creation of Special Assessment Districts for Critical
Infrastructure Needs (G.S. 121-38), with a sunset date of July 1, 2013 unless the Legislature acts to
renew it. This authority allows a petition by 50 percent of property owners in an area representing
2/3 of assessed value to create a district to finance infrastructure improvements. Public
transportation facilities are specifically included. Furthermore, unlike property taxes or MSD
payments, tax-exempt property owners such as institutions and non-profits would be required to pay
this type of assessment, on the theory that they also share in the benefits of such improvements.
Because of the petition requirements, its use is more practical when there are only a few owners
controlling a large amount of land, such as in a new subdivision. Creating such a district in the Gold
Line corridor would likely require tightly drawn district boundaries that include those owners who
benefit most and an active education and outreach campaign to generate support among those
property owners who would pay the assessments. Although a Special Assessment District was not
modeled for this study, the method by which revenues would be calculated and collected is
analogous to a MSD.
CONCLUSIONS
The proposed addition of the Phase 2 CityLYNX Gold Line to the Phase 1 Gold Line segment now
under construction in Uptown and Midtown could result starting in 2020 in the development of 731
additional residential units; 21,800 square feet of additional retail space; 276,800 square feet of
additional office space; and 101 additional hotel rooms. This represents approximately 1.1 million
square feet of new development. This would occur because of the demand that would be created for
homes and businesses along the Gold Line corridor, and developer decisions to invest in new
projects to meet an increase in demand.
If the City were to establish a Tax Increment Finance (TIF) district covering Phase 1 and Phase 2 of
the CityLYNX Gold Line, commencing as of 2015, the annual tax increment that would be generated
by 2035 would be $5.5 million. This figure excludes $2.7 million in TIF revenue that could be
allocated to the Red Line/Gateway Station Project. Projections for TIF revenues also exclude the
$13 million in Tax Increment Grants already committed to Elizabeth Avenue development that are
projected to be repaid between 2020 and 2030.
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
12
Adopting an additional Gold Line rate in existing Municipal Service Districts (MSD), and either
modifying the boundaries of existing MSDs and/or creating new ones to include all properties in the
Phase 1 and Phase 2 CityLYNX Gold Line corridors, with a rate of 0.02 percent, would generate by
2035 annual revenues of $1.56 million.
There are, however, potential challenges for how the City could convert these additional revenues
into bond proceeds to finance up front construction costs. These issues will require further study to
determine the amount of bond financing that could be issued and how the proceeds could be used.
LIMITING CONDITIONS
This analysis has been prepared by BAE based upon information provided to it by the City, MUMPO,
and other providers of market data. BAE is not responsible for any errors in data provided to it by
other parties. The analysis in this Study is based on current market conditions and trends, which are
inherently dynamic and subject to change. Future results cannot be guaranteed, nor can future
market cycles including booms and recessions be forecast, and therefore there is a potential wide
variation in future results and their timing. Shifts in demographics and consumer and business
preferences, as well as changes in federal, State, and local laws and policies can also impact the
decisions that developers, businesses, and households make on investment and location decisions
and thereby affect the validity of the findings in this Study. The information contained in this Study is
intended to be used for policy-level and public improvement decisions. It has not been prepared for
use in underwriting financial instruments, and its use for that purpose is not allowed without prior
written authorization from BAE.
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
13
Charlotte CityLYNX Gold Line Project: Economic Development Update Study
14
Charlotte Streetcar Extension Project:
Economic Development Update Study
Submitted to the City of Charlotte
May 2, 2013
CityLYNX Gold Line Economic
Development Update Study
bae urban economics
May 16, 2013
1
Purpose of the Update / Study Approach
!  Update
2009 BAE Study to inform two key questions
regarding CityLYNX Gold Line Phase 2:
!  What
are economic development benefits from Phase 2?
!  Value capture: what are potential new fiscal revenues from
CityLYNX Gold Line Phases 1 + 2 to help finance Phase 2?
!  Limited
update of the comprehensive 2009 study
!  Revised
long-term development projections
!  Value of new development and resulting Tax Increment
Finance (TIF) and Municipal Service District (MSD) revenues
2
CityLYNX Gold Line Phases 1 & 2
+ Entire Corridor
3
Market & Future Development Projections
!  2009
Study looked at four local market areas that
cover the entire CityLYNX Gold Line corridor
!  Update
excludes East area not served by Phases 1 & 2
!  Charlotte
has experienced recovery and strong job
growth, with a 6% gain in jobs 2009 -- 2011
!  Unemployment
!  New
higher because population growth faster
MUMPO 2013 projections through 2035 used
!  Compared
to 2005 projections, still strong long-term growth,
but with more new households, fewer new jobs
4
Updated Demand Projection for Phase 1
!  Updated
projection of Gold Line induced Phase 1
development through 2035, compared to 2009 Study:
5,000,000""
4,500,000""
4,000,000""
3,500,000""
3,000,000""
2,500,000""
2,000,000""
1,500,000""
1,000,000""
500,000""
0""
!  Projections
2009"Study"
2013"Update"
show +1.1 million square foot increase
5
Additional Demand Resulting from Phase 2
!  Different
measure – how much more development
does Phase 2 induce compared to “No Phase 2”:
2,500,000""
2,000,000""
1,500,000""
1,000,000""
500,000""
No"Phase"2"
With"Phase"2"
0""
!  +1.1
million square feet of additional development
6
y Use
Conservative
6,299,700
419,000
2,016,000
412,000
Expected
6,909,100
433,000
2,155,000
443,500
Best Case
8,420,500
486,000
2,418,000
499,000
Demand Sensitivity Analysis: Phases 1 + 2
!  Expected,
!  If
Conservative, Best Case scenarios
Gold Line corridor loses/gains share relative to region
10,000,000**
8,000,000**
6,000,000**
4,000,000**
2,000,000**
0**
!  Conservative
Conserva)ve*
Best*Case*
Conserva)ve*
Expected*
Best*Case*
to Best Case is a range of 2.7 million sq. ft.
7
Tax Increment Finance (TIF) Revenue
Projections – Assessed Value
!  Modeled
creation of new TIF District for Phases 1+2
!  Start
with 2015, measure growth above existing tax base for
¼ mile on either side of CityLYNX Gold Line
!  No
increase in taxes for existing property owners
Million $
$2,500#
$2,000#
$1,500#
$1,000#
$500#
$0#
2020#
2025#
2030#
2035#
8
Tax Increment Finance (TIF) Revenue
Projections – Revenues
!  Revenue
growth over time, challenge for debt issuance
!  Dedicates
revenue growth that otherwise goes to General Fund,
Municipal Debt Service, and Pay-As-You-Go
!  Elizabeth
Avenue, Red Line/Gateway Station project impacts
$6,000#
$4,000#
$2,000#
Thousand#$#
$0#
2020#
!  Takes
2025#
2030#
2035#
until 2035 to reach $5.5 million/year
9
rvative
4,660
Expected
5,497
Best Case
7,033
2,373
TIF Sensitivity Analysis
!  Expected,
Conservative, Best Case scenarios
!  Look
at 2035 to compare scenarios
!  Differences reflect different levels of development
Thousand $
8,000%%
6,000%%
4,000%%
2,000%%
0%%
Conserva2ve%
!  Potential
2035%
Expected%
Best%Case%
range of nearly $2.4 million/year
10
Municipal Service District (MSD) Revenue
Projections: Phases 1 + 2
!  Model
existing + new MSD for Phase 1 + 2 area
!  Added
.0200% rate for ¼ mile on either side of Gold Line
!  Applies to all properties within the area
$2,000#
$1,500#
$1,000#
Thousand#$#
$500#
$0#
2020#
2025#
2030#
2035#
!  Grows
to $1.6 million/year by 2035. Range from
Conservative to Best Case scenarios is $136,000/year
11
Conclusions
!  Proposed
Phase 2 of CityLYNX Gold Line projected to
add 1.1 million square feet of new development
!  New
TIF and MSD districts by 2035 could generate
$7 million/year in combined new fiscal revenues
!  Range
of policy, timing, and underwriting issues to
address before estimating the debt this could support
12
bae urban economics
Charlotte Streetcar Extension Project:
Economic Development Update Study
Submitted to the City of Charlotte
May 2, 2013
Discussion
bae urban economics
May 16, 2013
13
Questions and Answers
Questions from Council members related to the Gold Rush
Service and the CityLYNX Gold Line Project
Question 1: For the Gold Rush, why would we not charge a fare to avoid service cuts?
The FY14 proposed Gold Rush budget has a funding gap of $150,000 due to reduced
private contributions, the closure of federal grants and anticipated reductions in the State
Maintenance Assistance Program contribution. A fare could be charged for the Gold Rush
but it is estimated to have minimal effect on covering the cost for the following reasons:
Since the route has a limited service area the fare would be at CATS normal
shuttle service fare of 75 cents.
It is believed that the current corporate sponsors would not continue to sponsor
the service resulting in the need for fares to cover an additional $207,000 beyond
the existing $150,000 gap.
Based on transit industry models, ridership would decrease nearly in half because
of shifting from a free to paid service further reducing revenue.
Of the remaining ridership, approximately 63% of those would be riders that
currently own a CATS pass or currently pay when riding that stretch of the route.
These existing paying customers could choose to ride any of the five plus routes
that transverse down the route.
The remaining new fare paying customers would bring in approximately $60,000
annually.
Question 2: For CityLYNX Gold Line Phase 1 and 2, what are the plans for fare revenue?
CityLYNX Gold Line Phase 1:
During this phase fares would not be charged.
CityLYNX Gold Line Phase 2:
Plan to charge fares at CATS prevailing rate at the time of operation.
The fare would be same as the LYNX service which today is $2.00 per trip but
would be higher when Phase 2 service starts based on CATS policy requiring fares
to increase every two years.
Question 3: What are the areas of potential development and redevelopment along the
CityLYNX Gold Line?
Figures 1 and 2 below show the expected development opportunity areas along the
CityLYNX Gold Line route.
Figure 1
Figure 2
Question 4: What are the operating revenue assumptions for the CityLYNX Gold Line?
Are there sufficient funding sources identified to cover the projected operating costs?
Annual operating cost in the first year of operation for the CityLYNX Gold Line Phase 2 is
estimated to be $3.3 million to support vehicle operations, basic equipment maintenance,
and safety and security.
Funding for operations of the CityLYNX Gold Line will be provided from a variety of
sources including ridership fares, advertising, naming rights, and potentially some form
of property-based value capture revenue from sources such as Tax Increment Financing
(TIF) districts, Special Assessment Districts (SADs), or Municipal Service Districts
(MSDs). The potential funding sources below would be sufficient to cover the projected
operating costs.
Staff estimates fare revenue of approximately $1.1 million per year, to be
collected for the combined Phase 1 and 2 four-mile route at the same rate as for
the LYNX service.
A new Municipal Service District (MSD) could also be created to support annual
operating costs. According to the BAE Economic Development Update Study of
the CityLYNX Gold Line, a new MSD encompassing properties within ¼ mile of the
four-mile CityLYNX Gold Line Phase 1 and 2 corridor could generate annual
revenues of approximately $1.2 million from a 2.0 cent (per $100 valuation)
property tax.
Other potential sources of revenue to support the annual operating costs include a
reallocation of a portion of the annual allocation to the Business Corridor
Revitalization program ($750,000), Naming Rights ($200,000), and advertising
($93,000).
Additional funding will also be required to build a capital maintenance reserve to perform
regular vehicle overhauls every five years and mid-life vehicle overhauls every 15 years.
A revenue source will need to be identified and established to provide approximately $2.7
million every five years for the regular vehicle overhauls, and approximately $6.6 million
every fifteen years for the mid-life overhauls. In the fifteen years between Year 5 and
Year 20 of operations of the CityLYNX Gold Line, approximately $14.8 million will be
required to support the capital maintenance reserve.
Staff believes an appropriate source of revenue to build and maintain the capital
maintenance reserve would be to establish a Synthetic Tax Increment Financing (STIF)
district encompassing properties within ¼ mile of the four-mile CityLYNX Gold Line Phase
1 and 2 corridor. According to the BAE Economic Development Update Study of the
CityLYNX Gold Line, this STIF district could generate sufficient revenues to support the
capital maintenance reserve, and the timing of the five and fifteen year vehicle overhauls
would allow time for the STIF district to build sufficient revenues to cover those costs.
Question 5: What is the potential debt capacity from BAE-estimated annual revenues
derived from Municipal Service District (MSD) and Tax Increment Financing (TIF) districts
along the 4-mile CityLYNX Gold Line Corridor?
If the revenues are received as laid out in the BAE study, TIF and MSD revenues
along the ¼ mile Gold Line corridor could provide between $20 -$39 million of
debt capacity.
As discussed in page 10 of the BAE study, the report cannot state with certainty
when those revenues may occur between 2015 and 2035. Therefore, some
additional source of funding for capital would need to be identified in order to
support any delay in the receipt of value capture revenues.
BAE has made representation to staff that a portion of development associated
with the Gold Line is growth that has been redistributed along the East/West
corridor from other parts of the city. City wide growth is already projected in the
General Fund forecast and the debt capacity for the proposed CIP. Gold Line
value capture could negatively impact projections.
Question 6: What are the estimated number of jobs that will be created by the CityLYNX
Gold Line?
In May 2013, City Council asked staff to provide a report on the employment impacts of
the CityLYNX Gold Line, similar to the employment impact estimates made for CIP
projects under discussion by the Economic Development Committee and the
Transportation and Planning Committee in February and March. The analysis was
conducted by a team led by Michael Gallis and assisted by Frank Warren of Kimley-Horn
and Associates, Inc. The final report from the Gallis Team will be provided to City Council
upon its completion. A summary of the scope and major conclusions from the report is
shown below.
The employment projections contained in the Gallis Report are based on the
development projections in the Economic Development Update Study completed
by Bay Area Economics (BAE) in May 2013.
The analysis in the Gallis Report is concerned with the permanent employment
created by the office, retail and hotel development within this corridor. It does not
address the temporary jobs that would be created by the construction phase of
the CityLYNX Gold Line or buildings in the corridor. While significant residential
development would occur due to the CityLYNX Gold Line, this development
generates primarily temporary construction jobs, and does not directly generate
the permanent jobs that would be accounted for in this analysis.
The 2013 BAE Update Study focused on the 4-mile corridor comprising the
CityLYNX Gold Line Phases 1 and 2, which were divided into segments referred to
as Uptown Phase 1 and Midtown Phase 1 - which are funded and currently under
construction, and Uptown Phase 2, Midtown Phase 2, and West Phase 2 - which
are currently being considered for funding by City Council.
The permanent employment generated by each of these CityLYNX Gold Line
segments has been calculated along with a description of the market conditions in
each corridor segment. Totals for employment for both the Phase 1 segments and
the Phase 2 segments will be included in the report. Employment for the proposed
segments beyond Phases 1 and Phase 2 was not calculated. Thus the total
employment for the CityLYNX Gold Line contained in the Gallis Report reflects the
total for Phase 1 and Phase 2 only.
In the 2013 BAE Update Study, the increment of increase in office development
due to CityLYNX Gold Line in the Uptown Phase 2 and Midtown Phase 2 segments
is significant. In the Uptown Phase 2 segment, office space would increase 68.5%
due to CityLYNX Gold Line. In the Midtown Phase 2 segment, office square feet
would increase 63.1%.
The amount of office space due to CityLYNX Gold Line Phase 2 is projected to be
in the 60+ percent range.
The table below shows the projected number of permanent jobs expected by 2035 that
would be generated by the office, retail, and hotel development projected by BAE to
occur in each of the CityLYNX Gold Line segments.
CityLYNX Gold Line Phase 1 and 2 - Jobs Impacts by 2035
Office
Uptown Phase 1
Retail
Hotel
Total
2,087
118
25
2,230
622
197
31
850
Phase 1 Total
2,709
315
56
3,080
Uptown Phase 2
1,057
44
17
1,118
129
14
28
172
44
4
15
62
Phase 2 Total
1,230
62
60
1,352
Total CityLYNX Gold Line
(Phase 1 and 2)
3,939
377
116
4,432
Midtown Phase 1
West Phase 2
Midtown Phase 2
The Gallis Team also looked at the CityLYNX Gold Line’s potential synergy with other
investments, similar to the work they did for the other proposed CIP projects. Their
review concluded that:
The most important synergy generated by CityLYNX Gold Line will be created by
extending the impact of the commercial, residential, institutional and sports
development in the center city into the surrounding communities.
The synergy will act in two directions, the first being the accessibility of the center
city amenities from the surrounding neighborhoods and increasing the
accessibility of the Center City to a greater residential marketshed.
The impact of CityLYNX Gold Line on development on the corridor will be
significantly expanded by its connection to, and function as a local distributer for
the LYNX Blue Line and its extension to UNCC.
In the future, the CityLYNX Gold Line will act as a critical link between the Blue
Line station at the Transit Center on East Trade, the Red Line, and the proposed
high-speed rail Gateway Station on West Trade St.
ORDINANCE NO.
AN ORDINANCE TO AMEND ORDINANCE NUMBER 4910-X, THE 2012-2013 BUDGET ORDINANCE PROVIDING
A $63.0 MILLION APPROPRIATION FOR A 50% LOCAL MATCH FOR THE CITYLYNX GOLD LINE PHASE 2
BE IT ORDAINED, by the City Council of the City of Charlotte;
Section 1.
That the sum of $25,000,000 is hereby estimated to be available from Certificates of Participation
Section 2.
That the sum of $5,325,200 is hereby estimated to be available from Capital Reserves in
Pay-As-You-Go Fund 2011
Section 3.
That the sum of $9,670,573 is hereby estimated to be available from Transportation Project Savings
in the following General Capital Investment (2010) Fund projects:
Center
Amount
Fred D. Alexander Section C
Fred D. Alexander Section B
South Corridor Infrastructure
Kenilworth/Pearl Street
SCIP ED Infrastructure
Fifth Street Utilities
I-277 /Independence
Midtown Square Development
SCIP Scaleybark Smartgrowth
First Ward Infrastructure
I-277 Realignment
Section 4.
$
4,500,000
2,163,764
1,125,000
740,000
500,000
165,974
147,000
101,583
100,000
65,978
61,274
That the sum of $2,274,658 is hereby estimated to be available from Facilities Project Savings
in the following General Capital Investment (2010) Fund projects:
Providence Police Station
Fire Station 40 - Harrisburg Road
Solid Waste Admin Building
Charlotte Vehicle Operations Center (CVOC)
Eastland Fire Station
Louise Ave EMD Shop
Section 5.
249.05
249.04
494.00
287.48
494.45
493.42
481.10
481.04
494.46
477.30
337.00
477.88
367.22
264.42
474.62
367.24
264.45
$
700,000
492,962
334,145
312,053
305,509
129,989
That the sum of $20,729,569 is hereby estimated to be available from the following sources in the
General Capital Investment (2010) Fund:
Business Corridor Revitalization
Reserve for ED Initiatives
Future Road Planning/Design
Business Grant and Equity Loan Program
474.90
477.60
474.00
369.19
$
13,377,678
5,000,000
2,000,000
351,891
Section 6.
That the sum of $63,000,000 is hereby appropriated in the General Capital Investment Fund (2010)
CityLYNX Gold Line Phase 2 Project (49350)
Section 7.
That the existence of this project may extend beyond the end of the fiscal year. Therefore, this
ordinance will remain in effect for the duration of the project and funds are to be carried forward to
subsequent fiscal years until all funds are expended or the project is officially closed.
Section 8.
All ordinances in conflict with this ordinance are hereby repealed.
Section 9.
This ordinance shall be effective upon adoption.
Approved as to form: